Our minds really do play tricks on us – the red dots are actually the same size. The irrational way the human brain processes data spurred the development of Behavioral Decision Theory (BDT), the academic discipline that applies psychology to decision making. BDT challenges the long-held assumption in economics and finance that people act in their rational self-interest, and has been gaining acceptance in the investment community as it helps explain many of the market’s anomalies. This issue of Global Foresight focuses on some of the key behavioral issues in investing and how we see them applying to current equity opportunities. With interest rates recently plunging again, our Head of Fixed Income Mark Iannarelli examines the hotly debated topic of Modern Monetary Theory which has many notable critics and advocates
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